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Power Plant Purchases

Nuclear Power in the USA Appendix 2

(Updated July 2009)

In mid-1999, the 670 MWe Pilgrim plant was sold to Entergy by Boston Edison for $14 million plus $67 million for fuel.

AmerGen, the joint venture of British Energy and PECO Energy (now Exelon), completed its purchase of the 930 MWe Clinton nuclear plant and the 790 MWe Three Mile Island plant at the end of 1999. However, its plan to acquire control of the two-unit Nine Mile Point nuclear power station (614 & 1140 MWe) was derailed by a minor shareholder exercising its veto. Constellation later bid successfully for the units.

In 1999, AmerGen won the Boldest Successful Investment Decision award from the Financial Times. AmerGen was cited as "a huge success ... with expected strong financial returns" and "a bold investment which has created new confidence in the US nuclear industry."

In March 2000, Entergy Corporation reached agreement to buy the New York Power Authority's (NYPA) Indian Point 3 (965 MWe) and Fitzpatrick (778 MWe) nuclear power plants for $967 million, topping a bid by Dominion Resources. The complexity of the transaction is indicated by the terms that included $636 million for the two mid-1970s units, nearly $171 million for the fuel, $92 million to reduce NYPA's decommissioning obligation, and other amounts related to power purchase. There are also provisions for further payments if licences for the 25 year old plants are extended. NYPA retains the $630 million decommissioning funds and pay them when required, while Entergy accepts the $250 million risk of any adverse tax ruling on these. Up to 500 MWe of the combined output is available to NYPA at 2.9 cents/kWh, the remainder at 3.2 or 3.6 cents/kWh. The sale closed in November 2000.

In November 2000, Entergy became the successful bidder for Con Edison's (ConEd) 939 MWe Indian Point 2 unit (including the shut down unit 1 and 76 MWe of gas turbine capacity). The price was $502 million plus about $100 million for fuel. The companies also entered into a power purchase agreement for Entergy to sell the output of Indian Point 2 to Con Edison at an average of 3.9 cents/kWh through the end of 2004, as well as a capacity purchase transaction agreement for Entergy to sell the installed capacity of Indian Point 2 to Con Edison through April 2005, with options for capacity purchases for another six years.

In June 2000, AmerGen received approval to purchase the elderly 650 MWe Oyster Creek plant for $10 million, and the 522 MWe Vermont Yankee plant for $61 million. However, the latter deal was vetoed by state regulators and the plant was auctioned.

In August 2000, Dominion Resources agreed to pay $1.3 billion in cash for the Millstone nuclear plant, about $600 for each kilowatt of generating capacity. The Northeast Utilities plant comprises the 1150 MWe unit 3 and the 858 MWe unit 2,  which were 14 and 25 years old at the time of the deal.  Unit 1, which is being decommissioned, was also included. The price included $105 million for fuel, but only 93.5% of unit 3, since minority shareholders wished to remain.

In December 2000, Constellation Energy, owner of Calvert Cliffs nuclear power plant, agreed to buy Nine Mile Point for $815 million from Niagara Mohawk Power Corporation and other utilities. The deal included unit 1 (609 MWe, started in 1969) and 82% of unit 2 (1,148 MWe, started 1988) for $737 million, plus $78 million for fuel. This is about 3.5 times the price AmerGen agreed to pay for the plant in 1999. Constellation agreed to sell 90% of its output to the vendors for 10 years at about 3.5 cents/kWh. Some $450 million in decommissioning funds were to be transferred to Constellation.

In 2001, PECO (now Exelon) and PSEG concluded the purchase of minor shares in five large reactors from Connectiv Energy.

In August 2001, Entergy Corporation became the successful bidder for the 29-year-old Vermont Yankee power station. Entergy paid $180 million for the 522 MWe plant, $35 million of this for fuel. It took over both the decommissioning liability and the existing fund for this. Power is sold to local utilities (former owners) for 3.9 to 4.5 cents/kWh to 2012. Entergy paid almost three times the price which had been agreed in 2000 with AmerGen.

In April 2002, FPL Energy became the successful bidder for 88.2% of the 12-year-old Seabrook plant. The utility agreed to pay six utility vendors $836.6 million for the share in the 1161 MWe PWR reactor, being $749.1 million for the plant (including decommissioning trust fund), $61.9 million for fuel and the balance for components of an uncompleted second unit. FPL Energy is the US leader in wind energy generation and a sister company to Florida Power & Light, which operates four PWR units.

In September 2003, British Energy (BE) agreed to sell its most profitable asset - the half share of US utility AmerGen - to FPL Energy for $276.5 million. The proposed deal was the result of its plan to realise the value of its AmerGen equity independently of Exelon, its joint venture partner. Exelon then exercised its right of first refusal and bought the share. The sale was required by the UK government's restructuring provisions for BE.  In 2008, Amergen was absorbed into Exelon.

In November 2003, Dominion agreed to pay $220 million cash for Kewaunee, a 540 MWe Wisconsin reactor, the figure including $36.5 million for fuel. The sale was finalised in July 2005. Some $392 million in decommissioning funds were transferred.

Also in November 2003, Constellation Energy agreed to buy the R E Ginna nuclear power plant from New York utility Rochester Gas and Electric Corporation (RG&E) for $401 million plus $21.6 million for fuel. The 495 MWe PWR started up in 1969 and is among the best-performing in the US. The sale was contingent upon the licence extension taking its life to 2029. (The Nuclear Regulatory Commission approved the licence renewal in May 2004.) A planned uprate enabled by a steam generator replacement in 1996 increased capacity to 610 MWe. A sales contract commits 90% of ten years output to RG&E at 4.4 cents/kWh average.

In March 2004, Cameco Corporation agreed to buy American Electric Power's 25.2% stake in the South Texas Project plant - two 1,250 MWe PWRs which started up 1988-89 - for $279 million plus fuel, but two of the owners - Texas Genco Holdings and City Public Service Board of San Antonio - then exercised right of first refusal, leaving Cameco with a $7 million consolation fee. (Texas Genco was acquired by NRG Energy in 2005.)

In July 2005, FPL Energy agreed to pay $380 million for 70% of the Duane Arnold BWR (600 MWe capacity, following an uprate approved in November 2001) from an Alliant Energy subsidiary, which continued to buy the power. The plant is run by Nuclear Management Company and a licence extension application was submitted in September 2008.

In July 2006, Entergy agreed to buy the 798 MWe Palisades nuclear power plant from CMS subsidiary Consumers Energy for $242 million ($301/kWe) plus $83 million for the fuel and $55 million for other assets. It started up in 1971 and a 20-year licence extension to 2031 was granted early in 2007. Entergy is selling all the power back to Consumers Energy for 15 years. Responsibility for eventual decommissioning of the plant was transferred to Entergy, though the vendor retained $200 million of the $566 million decommissioning funds, with the later return of $116 million more pending a favorable federal tax ruling.

In December 2006, FPL Energy agreed to buy the Point Beach nuclear plant. The two units total 1012 MWe and had just had licences extended to 2030 and 2033. The vendor is Wisconsin's We Energies, which continues to buy the power. The final price was $719 million for the plant, plus $205 million for fuel and inventory. FPL assumed responsibility for decommissioning and $390 million in trust funds were transferred to FPL for this. The deal was approved in September 2007.

Also in December 2006, Duke Energy and North Carolina Electric Membership Corporation (NCEMC) announced agreements to purchase Saluda River Electric Cooperative's 19% ownership interest in unit 1 of the Catawba nuclear plant in South Carolina. Duke paid $158 million for about 72% (approximately 154 MWe) of Saluda River's stake, and NCEMC paid $42 million for the remaining 28% (approximately 60 MWe) share. Following the deal, NCEMC and Duke Energy own approximately 62% and 38% of Catawba 1, respectively.

The private equity buyout of TXU Corporation, with its two 1,150 MWe Comanche Peak reactors, announced in February 2007 was completed in October of that year. TXU has become Energy Future Holdings Corp which comprises three operations: TXU Energy for retail, Luminant for power generation and Oncor for transmission and distribution.  Luminant has taken over plans to build two new 1700 MWe Mitsubishi US-APWR reactors at Comanche Peak in Texas and possibly others as well.  Plans for eight coal-fired plants were scrapped earlier in the year.  Environment groups have supported the buyout with its changed policies, and a new director who is chairman of one such group "will lead the effort to make climate stewardship central to corporate policies."

In December 2008, Constellation Energy accepted a bid by Electricité de France (EDF) for half of its nuclear business, which consists of two reactors at Calvert Cliffs in Maryland, two at Nine Mile Point in New York and the Ginna reactor in New York. All the five reactors have been granted 20-year licence extensions, and the deal values them at about $2250/kWe net. The New York plants were bought by Constellation for $533/kW earlier in the decade.

US nuclear power plant purchases since mid-1998

Buyer Reactors Net MWe
sold
Plant price
$ million
Sale completed
(expected)
Price*
$/kW
Value**
$/kW.y
Entergy
Pilgrim
670
14
July 1999
21
1.6
AmerGen
Three Mile Island
786
23
Dec 1999
29
1.9
AmerGen
Clinton
924
20
Dec 1999
22
0.8
AmerGen
Oyster Creek
619
10
Aug 2000
16
1.8
PECO (Exelon) et al
Peach Bottom, Hope Creek, Salem
714
20
Jan & Oct 2001
28
1.5
Entergy
Fitzpatrick & Indian Point 3
1743
636
Nov 2000
280
18.4
Entergy
Indian Point 2
939
502
Sept 2001
49
3.8
Dominion
Millstone
1947
1193
March 2001
613
30
Constellation
Nine Mile Point
1536
675
Nov 2001
439
23
Entergy
Vermont Yankee
510
145
July 2002
288
28
FPL Energy
Seabrook
1024
749
Nov 2002
731
26
Exelon
Clinton, TMI, Oyster Creek
1210
276
Oct 2003
228
about 18
Constellation
R E Ginna
495
408
June 2004
810
31
Genco & CPS
South Texas
630
279
May 2005
443
18
Dominion
Kewaunee
540
192
July 2005
355
39
FPL Energy
Duane Arnold
419
300
Jan 2006
716
80
Entergy
Palisades
798
242
April 2007
303
12
FPL Energy
Point Beach
1012
719
Sept 2007
710
30
Duke, NCEMC
Catawba
229
200
 
874
35
EDF
Calvert Cliffs, Nine Mile Point, Ginna
1997
4500
(2009)
2253
 

 

* Price excludes fuel
** Value based on years between announcement and end of operating licence


Further Information

General sources

U.S. Nuclear Plant Sales table on the Nuclear Energy Institute website (www.nei.org)